Q1 2023 Logiq Inc Earnings Call

May 17, 2023

Speaker 1: Thanks for watching!

Speaker 1: Music

Speaker 2: Williams on this call.

Speaker 3: meeting is being recorded.

Speaker 1: Thank you.

Speaker 3: You are muted. You can mute or unmute yourself by pressing star 6.

Speaker 1: Sam

Speaker 2: Can you hear me? Yes. Okay, good. Just trying to get Peter to unmute. Yeah. Okay. Okay.

Speaker 4: Good morning, Sam. Good morning. How are you? Good. How are you? It's good to see you. I'm good. Good morning.

Speaker 2: Let's catch up later today. Okay, sounds good.

Speaker 2: Perhaps.

Speaker 5: Hey, Brent.

Speaker 1: Man.

Speaker 6: John ?

Speaker 7: Hello Brent.

Speaker 2: Hello, John . Hello, Tim. That was a Wednesday hello. Over and over the hump hello. Hello, Grandpa.

Speaker 2: We actually have a decent sized participant list today.

Speaker 2: I'll give everyone a few more minutes.

Speaker 1: This is refreshing.

Speaker 2: I was on a call the other evening with Bill Farron. Hello, Bill.

Speaker 2: one of Bill's listeners made a keen observation, which I thought about for a long time afterwards. He kind of touched a nerve. He said to the rest of the audience, beware of smiling CEOs. So and.

Speaker 2: I am smiling because I'm happy that we have such a great turnout. I see a number of our

Speaker 2: of our colleagues here, which I always appreciate the participation.

Speaker 2: This past year has been notoriously challenging and it's nice to see that people on the team

Speaker 2: still religiously show up to participate and listen in. So that's good stuff.

Speaker 2: I am just looking for my presentation notes here.

Speaker 8: Is it okay if board members smile?...

Speaker 2: Board member singular.

Speaker 2: You. Well, there's me, myself and I, so there is. Yeah, so yeah, that's a dad joke.

Speaker 2: Okay.

Speaker 2: All right, well super.

Speaker 2: Okay, let me make sure I've recorded it. Yes, recording. Good morning and thank you everyone for joining us today to discuss the results for logic's year ended December 31.

Speaker 2: 2022.

Speaker 2: Joining us today are myself.

Speaker 2: Our Chief Operating Officer, Chris Andrews.

Speaker 2: and the founder of the company's new Park Place subsidiary, Samantha Edis and her brother Tim, who is a co-founder. Our former COO and probably busier than ever on the M&A and strategy side, John McNeil.

Speaker 2: the folks from CMA and about 40 some odd.

Speaker 2: 40 some odd participants from the shareholder base. So thanks everyone for joining, much appreciated.

Speaker 2: participants from the shareholder base. So thanks everyone for joining, much appreciated.

Speaker 2: go through some prepared remarks.

Speaker 2: winging it a little bit. And then I've invited Chris and Sam to say a few words, as well as our new director, Peter Bordas.

Speaker 2: And I see him right there. You can wave if you'd like, Pete.

Speaker 2: And smile. Yes. And also, one of our one of our shareholders who has made some very keen observations and some advice I've taken to heart brought it up the other day that I should probably expand the speakers who

Speaker 2: are on the calls because lately it's just been me. And perhaps some people might think, hey, is this just a one man show and it's Brent in his basement? Or is there really still a team here? Yes, there is. So So

Speaker 2: So I see a bunch of them on here I won't say hi to everyone, because there's numerous but you guys can see there's Samantha Edis. Chris Andrews, John McNeil, and Peter Bordas who's just joined our board.

Speaker 2: So after the presentation, I will take some Q&A. I'll give everyone.

Speaker 2: some hints on how to

Speaker 2: to send questions. If you can do so, I think it's relatively easy from the computer, maybe not so much from the phone in any case. If I don't answer a question that you have, ping me afterwards and it may take me a while to respond because lately I've been getting about 200-300 emails a day every day.

Speaker 2: Onwards. Okay. So last week, as you saw, we reported our financial results for the fourth quarter and year end 2022.

Speaker 2: Onwards, okay. So last week, as you saw, we reported our financial results for the fourth quarter and year end, 2022. To mention that in July , we reported our financial results

Speaker 2: Last year we completed the spinoff of our GoLogic business, which included the CreateApp and AppLogic e-commerce technologies.

Speaker 2: So in the press release that we issued and in the financial results on Form 10-K , we reported pro forma financial results that exclude the divested business. And so we only provide the results from our continuing data logic operations.

Speaker 2: For those of you who are interested, our GAAP results for the full year 2022 can be found at sec.gov in the annual report. Be followed on Form 10-K .

Speaker 2: Financial highlights. On a pro forma basis, our fourth quarter 2022 revenues.

Speaker 2: totaled 8.4 million, which was up 121% from the previous quarter. If you segment it out and up 22% over the...

Speaker 2: same year ago, Cora.

Speaker 2: Our full year revenues totaled 20.3 million, which was down 12%.

Speaker 2: predominantly in the first part of the year. That was partly due to lower digital advertising spend industry-wide and only about nine months of contribution. www. covertstartup.com

Speaker 2: from our Battle Bridge acquisition, which we closed on March 31st of last year.

based on the strong existing contracts and revenue streams that we secured in the second half of the year. Actually, it was in September and October , we officially onboarded one particular client in mid-November, which contributed...

a substantial amount to revenues. So we entered this year at a more than 40 million dollar annualized revenue run rate and so we do expect with the recent acquisition of park place payments we are estimating our annualized run rate.

increased to more than 45 million for this year.

Q4 2022 operational highlights. In terms of operational progress for the quarter, we continued to advance the completion of the merger of our data logic business.

In the filings and in the press releases, you'll see it as DLQ. But that is our core business. And that is a business combination with the NASDAQ-traded SPAC, Aubrey, that we announced last September . We have been processing comments that we received from the Securities and Exchange Commission.

regarding the merger and our related form S4 filing. We had to do a standalone audit of 2020, 2021, and last year of DLQ on its own, minus the corporate expenses of being public and other ancillary costs that would have included app logic.

That is why we were late filing because we did not complete that until after the after the deadline for filing so we extended a bit beyond. So there's actually two audits DLQ itself and then then what we had to roll into the public company financials. We did have a great fourth quarter, and it was because we were...

strong customer pipeline and certainly their head of sales and founder Travis Phipps who has secured that contract and has worn the pipeline. This is actually the largest such contract in our history and it contributed significantly to the $8.4 million in revenues that we booked in the fourth quarter.

Also in the fourth quarter, we formed a strategic alliance with MediaJel, which is a leading marketing platform that primarily serves regulated industries.

Our consumer targeting and acquisition capabilities have been greatly enhanced by access to media gels.

consumer audience engine and programmatic digital marketing platform. I'm going to have Chris Andrews speak more to this in a few moments.

I'm also going to fast forward here to the end of

Last month, when we announced that we acquired Park Place Payments, which is an award-winning fintech company, which has been delivering innovative merchant payment solutions and adjacent financial services to SMBs through its nationally distributed local sales force.

I'm sure that sounded like it was written for me and I read it because I did. Park Place's annualized transaction volume currently totals around $180 million, which it expects to generate around $5 million in revenue and anticipating positive cash flow exiting this year.

And this additional revenue has increased our overall annualized revenue run rate to more than $45 million for this year. That excludes other acquisitions that I have said we are targeting and will move forward on. Sam will share more about Park Place and her goals for the company shortly.

integration of BattleBridge along with a very challenging restructuring plan designed to better position us for growth both organically and through acquisition.

This involved completing the spinout of the GoLogic business, and our strategy for this spinout has

gone relatively well with GoLogic recently completing a transformative major acquisition and a number of letters of intent for continued acquisitions.

We anticipate retaining our minority ownership along with those shareholders who received GoLogic shares to become great beneficiaries of this progress. We expect to announce some more very exciting news before the end of the week.

retaining our minority ownership along with those shareholders who received GoLogic shares to become great beneficiaries of this progress. We expect to announce some more very exciting news before the end of the week. Thank you and Dec, please complete your reports.

So we're quite excited about that.

For continuing operations, by late last November we began to see strong traction with our growth strategy in the major client win from BattleBridge.

As I mentioned, this helped us begin the year at an estimated annualized revenue run rate of more than $40 million. I think I've said that three times.

four times. We do continue to see industry environment presenting many accretive M&A opportunities for us. This includes companies involved in ad tech, direct-to-consumer sales, specialized digital advertising, and performance marketing.

all of which are generating significant revenue growth and are break even to profitable.

And we have been evaluating a number of potential acquisitions that are at various stages and could significantly strengthen our platform. What I would point out is that the addition of Peter Bordas to the board, certainly Chris Andrews is our COO.

We hoped it would free John up a bit more on the M&A side, but with the addition of Sam and Tim on the Park Place side, Tim's going to be able to certainly assist on the M&A and strategy side while letting Sam continue to focus on building the sales team.

Thank you.

Sorry, I'm just still admitting people from the waiting room to the call.

Peter is a 25-year ad tech veteran and again recently joined our board. Pete's going to be helping us on acquisitions and certainly developing strategy. Pete, you can wave again if you want. Hey, everyone. Yeah. Good to be here.

year ad tech veteran and again recently joined our board. Pete's going to be helping us on acquisitions and certainly developing strategy. Pete, you can wave again if you want. Hey everyone. Good to be here. Great. How you doing?

Okay, so at the beginning of this year we appointed Chris Andrews as our new Chief Operating Officer. This panel has been recorded for Levittown, New York City,

he succeeded John , who was appointed to the new role of SVP of mergers and acquisitions. Chris brings us more than 20 years of leadership experience in a great talent for unlocking revenue opportunities.

As former Ogilvy Health and WPP Chief Technology and Information Officer, he has an extensive record of achievement, including creating $150 million plus revenue streams through technology innovation. And with that introduction, I would like to hand it off to Chris.

to talk a little bit about MediaGel.

Thanks Brent and thanks everyone for joining us today. Last year we launched an initiative to enter regulated industry verticals and as Brent stated this resulted in us forming a strategic alliance with MediaJel. In addition to the regulated brands this partnership gained us access to MediaJel's consumer intelligence platform and increased our channel reach.

allowing us to strengthen our capabilities for consumer targeting and new customer acquisition. We are continuing the process of integrating Medi-Jails platform from our AI powered programmatic advertising platform, Rebel AI, which you probably heard about, which enables brands and agencies to securely buy media and activate their first party data.

We anticipate the results of this integration to enhance our revenue generation and expand our gross margins beginning in this quarter.

Medi-Joe represents an ideal partner with domain expertise in a regulated industry, solid customer base, new targeting tools for customer acquisition and engagement, and a transparent attribution technology.

Together, we expect to become a key player in the cannabis digital marketing and advertising space.

And as you know, just to give you guys a heads up as of today, we have several brands already successfully launched and running because of this partnership.

Now I'd like to turn the call over to Sam, talk a little bit about Park Place. Hey, Sam. Thanks so much, Chris. So it has been an amazing few weeks. We are so excited to be part of the Logix family. I can't even express what a synergistic culture it is, and we're just thrilled. And now I think given the capabilities of Logix's powerful AI-driven digital technology,

from 1500 where we are today. We'll also be widening our array of product offerings. So right now we sell payment processing but we're going to be expanding that to a number of other products. I saw in the chat, someone asked about selling Logix products and definitely that is in the works. We have a lot of things that we're excited about adding.

to our suite of offerings, a lot of higher margin products, which we're really excited about. We'll also be expanding our base of merchant customers to generate approximately 15 million in revenue over the next year. And within 24 months, we expect to have more than 5,000 sales agents, which we call account executive.

which we intend to blanket every zip code in the US. And this is just the start, so we're really excited.

Awesome. So are we. Well, we is now we. Thanks, Sam and Chris. As I mentioned, now the sixth time, we're starting the year at a $40 million plus run rate, and now with Park Place, we should see an additional $5 million.

So we're definitely poised for a great year, that's for sure. I'll try not to mention that a seventh time. We are extremely excited about it. And that's why it's written into my notes so many times. Together with DLQ, or our core business being NASDAQ listed.

through the pending DSPAC in with additional strategic acquisitions lined up and ready to complete within the next 90 to 120 days, plus plenty of exciting customers in the pipeline. This certainly creates many terrific opportunities that benefit our shareholders. One additional highlight I'd like to add.

And most of you realize there is an opportunity to utilize the logic publicly listed status to acquire a business into it as we move our core business and part place, which is also going to be part of our core business into the Aubrey SPAC.

We did make an announcement last November that we had an exclusive merger agreement with the company valued at around 200 million. That exclusivity expired December 31st. We chose not to renew it.

an announcement last November that we had an exclusive merger agreement with the company valued at around 200 million. That exclusivity expired December 31st. We chose not to renew it.

We went for something a little larger because there were other ones being presented to us. And we're currently in late stage discussions with one in particular that could command over 300 million in value. So what does that mean to shareholders? Public shareholders of

What goes into the logic platform, I'm sorry, it goes into the logic listed vehicle post DSPAC will retain a 10% ownership. And so if the valuation is called at 300 million, there would be a $30 million.

participation from our current shareholders. All of those shares would be free traded because we would be the float. If they grow dramatically like this particular target is, that could end up being significantly more. So we plan to update everyone on this.

shortly as terms solidify. And for right now, we are happy to take questions.

I am looking at the messages here. A couple from Rich.

Any new contracts like the one BattleBridge got at the end of 2022 that has a plus or minus 3 million a month run rate in the works? Sure, okay. So the client that we picked up, there are currently seven others that are similar in size.

And their management, well, actually not their management, their founders and or CEOs are actually in discussions with us right now about potential onboarding sometime later in the year. One of the things that we're looking at doing and Chris touched on it earlier with the media gel platform tying up with what we have. Not just the old

We're able to offer companies that are in the e-commerce space, both in the regulated industries, which would be cannabis, certain elements of fintech, pharmaceutical, insurance. The ability to have highly effective marketing and advertising campaigns. We're able to offer companies that are in the e-commerce space, which would be cannabis, pharmaceutical, insurance. We're able to offer companies that are in the e-commerce space,

that have an AI component in there that teaches the platform based on current and past ad marketing campaigns on how to optimize it.

Maybe if it does such a great job, we'll all be out of jobs and it'll be a bot speaking next time. But in answer to your question, Rich, yes, there are other ones just like that in the works.

Part place sales team adding data logic advertising product offerings to their payment solution vendors. Yes. And that is something that Peter and Chris and Sam and Tim are currently working on along with the rest of our team. So we'll be able to announce those initiatives.

throughout the year. See, okay, Rich already asked, actually, let's see. So Sam, this one's for you, this is for Rich. Yeah, so Rich, it's a great question. We have not been really focused. I would say that we are definitely specialized in certain industries, but.

our national reach. So, you know, to get two superstars in every zip code in America is our goal. And we're on that path. All right.

reach. So, you know, to get two superstars in every zip code in America is our goal, and we're on that path. Great. Thanks, Sam.

Here's one. Please update on Canadian NEO exchange on HALT as they are looking for financial documents to upload on Ontario Securities Exchange. Can you please update on this?

Yes.

had us uplist on the NEO exchange in 2021.

We used an investment bank, Mackie, which is now known as Research Capital, and they placed 78% of the shares in the hands of five groups that...

like to paint themselves as funds, that they are essentially toxic lenders or.

toxic financiers.

They subsequently sold all of their shares into the market and held onto their warrants, which they then used to short our stock over the subsequent six months. I would call that a disaster. I've been trying to get delisted.

from the NEO for quite some time and they actually would not let us delist. And so I took a different route and stopped reporting to the Ontario Securities Commission in hopes that they would delist us. When we didn't file our 10K with them, they halted trading. And I've gotten a number of...

requests about that. The unfortunate part about that is not that that we were halted in trading but that Canadian shareholders could not execute trades via the OTC. Now the shares are fungible meaning that if you hold shares and we delist

officially delist on the NEO, then you can sell your shares by way of the OTC. And I am personally pleased to report that I received an official delisting notice from the NEO last week. So we will no longer train on the NEO.

And if you are a Canadian shareholder and you desire to buy or sell, I would hope you would buy, you can do so through your broker and those trades will be executed on the OTC now that we are officially delisted.

And delisting is usually a bad thing, but in this instance, I think, given the predatory nature of the NTRs who took nearly 80% of the IPO and still hold those warrants, it's not a good thing. So I appreciate that.

That's the status update. If you need more, please reach out. Again, bear with me. I'm not able to respond as quickly as I can, but I'll do my best.

Oh, here's one. Okay. Any timeline when logic exchange restriction will be removed.

Oh, here's one. Okay. Oh, anytime line when logic exchange restriction will be removed. I think that was

answered in that last one, Tariq. And what else? Anyone?

Before we conclude today's call, I need to provide our safe harbor statement that includes important cautions.

This is the point in time where everyone hangs up. Includes important cautions regarding forward-looking statements made during today's call. Actually,

No one has to listen to this. It's going to take me about four minutes to read. So thanks everyone for joining. I'll read this to myself.

Thank you. Thanks Sam. Bye everyone. Bye everybody. Statements made by us during today's call may have contained forward-looking statements within the definition of Section 27A in the Securities Act of 1933 as amended and Section 21E of the Securities Act of 1934 as amended.

Thank you. Thanks Sam. Bye everyone. Bye everybody. Statements made by us during today's call may have contained forward-looking statements within the definition of section 27A in the Securities Act of 1933 as amended and section 21E of the Securities Act of 1934 as amended. Such forward-looking statements should not be...

used to make an investment decision. All statements other than statements of historical fact included herein are forward-looking statements, including statements regarding the continued growth of the e-commerce segment and the ability of the company to continue its expansion into that segment.

the ability of the company to attract customers and partners and generate revenues.

the ability of the company to successfully execute its business plan.

the business strategy, plans and objectives of the company, and any other statements of non-historical information.

Such forward-looking statements are often identified by the use of forward-looking terminology such as believes, expects, or similar expressions that involve known and unknown risks and uncertainties. While we believe the expectations reflected in such forward-looking statements are reasonable, we believe that the expectations of the

and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this conference call.

Our actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in our periodic reports filed with the Securities and Exchange Commission and available on its website, www.scc.gov.

All forward-looking statements attributable to the company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the company does not assume any duty to update these forward-looking statements. Thank you again for joining us today. This concludes today's conference call.

You may now disconnect.

All right.

Hey Pete, Chris LeCoursier!

Hey Pete. Chris LaCorsier! Hey man.

Can you say that 10 times fast now Brent? I was thinking about reading some ebooks.

Yeah, it was very relaxing. Thank you. Yeah. So.

All right.

Thank you to everyone in the new Mr. Brent. I will talk with you later. Sounds good. All right. Bye.

I'm Chris.

Q1 2023 Logiq Inc Earnings Call

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